The Canadian Student Housing Opportunity

*All the information has been revised and updated as of June 2025*

Market Overview

The underserved student housing market is suffering from rental supply shortages caused by accelerated demand, creating a unique opportunity for investors. In 2023, Canada experienced a 29% increase in international students, with a large portion attending Ontario universities.² Residence buildings located on campus and privately owned off-campus buildings provide about 155,000 beds representing only 16% of full-time student enrollments. Of this total, about 52,600 beds are located in off-campus privately owned buildings.³

Enrollment Trends at Major Canadian Universities

Figure 2: The plot demonstrates enrollment over the past three years, which has remained relatively consistent across Major Canadian Universities.⁴ Although enrollments may be impacted by stricter immigration policies forecast to decrease the presence of international students in Canada, the existing student body significantly still outweighs the available on-campus housing.

On-Campus Bed Availability at Major Canadian Universities

Figure 3: The plot demonstrates the quantity of available on-campus beds for students in 2024. Universities are undersupplied relative to their total student body, fueling demand for on-campus, purpose-built student accommodations.⁵

Development Trends & Pipeline

To combat the student housing crisis, developments are in the pipeline to work towards an equilibrium. In 2022, British Columbia, Ontario, Quebec, and Nova Scotia added around 5,800 beds, mainly in off-campus buildings. In 2018, the British Columbia government invested in a development that will include buildings to accommodate an additional 8,000 students. This project is expected to be completed in 2028 and will allow students to find housing stress-free and avoid the high student rental premiums.⁶ According to The Toronto Star, students pay 25% more for housing than the average Canadian renter.⁷ The University of British Columbia typically has a list of around 6,000 students hoping to be placed into student houses; they recently opened an additional 6,535 beds, with more on the way.⁸

Vancouver and Hamilton are both undergoing significant developments to manage the rise in student enrollment. Vancouver plans to increase student housing by around 30% and Hamilton by 15%. The University of Western Ontario, located in London, Ontario, is constructing two new residence buildings to accommodate 1,000 students, significantly boosting the supply.⁹

These are positive steps in the right direction to accommodate students. However, the large void between demand and supply for student housing still has yet to be addressed sufficiently. This indicates that this market will continue to outperform and provide strong returns to those investing in the sector.

Recent Developments and Transactions

The Parkway Lofts

The Parkway Lofts, located at Brock University, is a recently completed project by Campus Suites and can accommodate 543 students. The Parkway Lofts offers 6 different unit configurations and sizes. It is equipped with high-end amenities and appliances. This residence also includes community space such as game rooms and study rooms.

The Quad

The Quad, located at York University in Toronto, Ontario, is currently undergoing Phase 3. Forum Asset Management, in tandem with Campus Suite, is the first student housing project in Ontario to break ground under Ontario’s Bill 185, Cutting Red Tape to Build More Homes Act. With completion slated for 2026/2027, the Quad Phase 3 will introduce 841 additional beds across two eight-story buildings.¹⁰

Rental Trends and Returns

Short-term returns in the student housing sector are comparable to those of standard multi-family investments. Cushman Wakefield reports cap rates for 2024 multi-family at approximately 4.5%, consistent with Alignvest Student Housing REIT’s analysis.¹¹

In 2023, the student housing sector experienced an all-time low vacancy rate of 1.5%, suggesting that demand for affordable housing is apparent and undersupplied. Furthermore, the requirement that parents sign as guarantors on student leases diminishes collectability concerns. In addition, student housing tenants are enrolled for an average of four years, making the minimum turnover rate 25% compared to 13.6% for the standard market.¹² This rapid turnover has allowed landlords to capitalize on consistently rising market rates.

Since most university students live with roommates, this creates an environment to realize higher prices per square foot, as rent is charged per bedroom instead of per unit. In turn, more opportunities for property owners and investors to increase their returns are created in the student housing sector.

Monthly Rent* Benchmark for Private Student Residences in Canada

*Converted from EURO to CAD, based on 2022 weighted average currency conversion*

Figure 4: This plot demonstrates the average student rental costs over the past three years, showcasing the appreciating nature of private student residences but also the need for more housing options to improve affordability for students.¹³

Conclusion

Overall, the shortage of rental supply coupled with high turnovers and low vacancies demonstrates that the student housing sector is experiencing dynamic market trends, creating prime opportunities for investors. Peakhill Capital is a leading commercial real estate asset manager and a CMHC-approved lender, who is active across all real estate asset classes. For more information on Peakhill’s financing solutions, please contact [email protected].